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502. The Silk Road, Sand Castles and the U.S. China Rivalry
- Author:
- Alan Guidetti
- Publication Date:
- 07-2015
- Content Type:
- Working Paper
- Institution:
- The Geneva Centre for Security Policy
- Abstract:
- Rumours in American media and within policy circles in Washington hint at a shift in the making in US policy towards China. Accordingly, the carefully managed balance between cooperation and constraint, which was designed to accompany and guide the rise of China, might give way to a more confrontational US posture. The cause for a reorientation in US policy is ascribed to the assertiveness of Beijing in the territorial disputes and land reclamations in the China Seas. However, the growing US nervousness about China, as illustrated by blunt warnings to Beijing by Defense Secretary Ashton Carter, goes beyond the Chinese build-up of artificial islands, which fuels the current dispute. Washington recently opposed Chinese efforts to set up the Asian Infrastructure Investment Bank (AIIB), a central pillar of the “New Silk Road” project that will advance the centrality of China within the Eurasian space and beyond. As competition rises between the two powers, sources of tension multiply, thereby increasing risks of conflict.
- Topic:
- Foreign Policy, Economics, Power Politics, and Hegemony
503. Europe: The Current Situation and the Way Forward
- Author:
- Wolfgang Schäuble
- Publication Date:
- 04-2015
- Content Type:
- Video
- Institution:
- Columbia University World Leaders Forum
- Abstract:
- This World Leaders Forum program features an address by Wolfgang Schäuble, Germany's Federal Minister of Finance, titled Europe: The Current Situation and the Way Forward. The address will be followed by a panel discussion and question and answer session with the audience.
- Topic:
- Defense Policy, Economics, International Trade and Finance, Regional Cooperation, and Monetary Policy
- Political Geography:
- Europe
504. Arctic Security Matters
- Author:
- Juha Jokela
- Publication Date:
- 06-2015
- Content Type:
- Working Paper
- Institution:
- European Union Institute for Security Studies
- Abstract:
- The Arctic region is currently undergoing major and rapid transformation, both environmentally and economically. This report, the outcome of a EUISS Task Force, examines how these changes carry significant political implications, and highlights the new security challenges that are emerging in the region.
- Topic:
- Economics, Environment, Politics, and Biosecurity
- Political Geography:
- Arctic
505. What Next for the IMF?
- Author:
- Edwin M. Truman
- Publication Date:
- 01-2015
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- After the Obama administration's four failed attempts to win congressional approval of the 2010 quota and governance reform for the International Monetary Fund (IMF), it is time to recognize that implementation of the agreement may be indefinitely delayed. The international community must therefore prepare for the likelihood of a new world order in which the IMF augments its funding and reforms its governing structure without US participation. This Policy Brief examines four options for the IMF: First, wait for the US Congress to pass the necessary legislation. Second, complete a new, augmented IMF quota and governance package and again wait for the United States to give its formal approval. Third, bypass the US Congress and risk losing the US veto over a few important decisions on the structure of the IMF. Fourth, let the Fund adopt a reform and financing package within a structure that potentially excludes US participation and eliminates the US veto in the new entity.
- Topic:
- Economics, International Trade and Finance, International Monetary Fund, Governance, and Reform
506. Service Sector Reform in China
- Author:
- Ryan Rutkowski
- Publication Date:
- 01-2015
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Faced with slowing economic growth, Chinese policymakers now recognize that the service sector of the economy—transportation, communications, finance, and health care—could spur economic activity and employment. The catch is that China must reform these and other areas to accomplish this goal. Chinese leaders have outlined an ambitious agenda for reform, but myriad vested interests could slow or block their plans. This Policy Brief evaluates the steps taken so far and the difficulties that lie ahead in implementing them. If policymakers fail to reform and open up the service sector, they run the risk of seriously impairing China's growth prospects.
- Topic:
- Economics, International Trade and Finance, Labor Issues, Financial Crisis, and Reform
- Political Geography:
- China
507. Japanese Investment in the United States: Superior Performance, Increasing Integration
- Author:
- Theodore H. Moran and Lindsay Oldenski
- Publication Date:
- 02-2015
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Japan is reemerging as the most important source of foreign direct investment (FDI) in the United States. In 2013 Japanese firms were the largest source of new inflows of FDI into the United States for the first time since 1992, injecting almost $45 billion of fresh investment into the US economy in that year alone. Moran and Oldenski show how Japanese investment in the United States differs from that of other countries along several dimensions. These differences not only make FDI by Japanese firms especially valuable but point to some important policy goals for attracting it. Although the automotive sector is the single largest industry for Japanese investment in the United States, the focus should not be on competing to attract the auto industry in particular nor should any active industrial policy of "picking winners" be pursued. Japanese investment is unique because of its research and development intensity, manifested across a number of industries in which Japanese multinationals invest other than automobiles. US policy should focus on reinforcing and expanding the factors that attract high-performing firms and high-value production stages to the United States, regardless of industry.
- Topic:
- Development, Economics, Foreign Direct Investment, and United States
- Political Geography:
- Japan
508. How Not to Regulate Insurance Markets: The Risks and Dangers of Solvency II
- Author:
- Avinash D. Persaud
- Publication Date:
- 04-2015
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Solvency II, which the European Parliament adopted in March 2014, codifies and harmonizes insurance regulations in Europe to reduce the risk of an insurer defaulting on its obligations and producing dangerous systemic side effects. The new directive tries to achieve these aims primarily by setting capital requirements for the assets of insurers and pension funds based on the annual volatility of the price of these assets. Persaud argues that these capital requirements will impose an asset allocation on life insurers and pension funds that does not serve the interests of consumers, the financial system, or the economy. The main problem with Solvency II is that the riskiness of the assets of a life insurer or pension fund with liabilities that will not materialize before 10 or sometimes 20 years is not well measured by the amount by which prices may fall during the next year. Solvency II fails to take account of the fact that institutions with different liabilities have different capacities for absorbing different risks and that it is the exploitation of these differences that creates systemic resilience. To correct this problem, Persaud offers an alternative approach that is more attuned to the risk that a pension fund or life insurer would fail to meet its obligations when they come due and less focused on the short-term volatility of asset prices.
- Topic:
- Economics, International Trade and Finance, and Budget
509. : From Rapid Recovery to Slowdown: Why Recent Economic Growth in Latin America Has Been Slow
- Author:
- Jose De Gregorio
- Publication Date:
- 04-2015
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Latin America's recent economic performance has been disappointing. After a very strong recovery from the Great Recession, growth has slowed considerably, and prospects for 2015 are dim. Among the seven largest economies in the region, output is expected to contract in Argentina, Brazil, and Venezuela, and Chile, Colombia, Mexico, and Peru are projected to grow by only about 3 percent. The decline was not caused by external factors but was mostly cyclical in nature and a result of low productivity. Although monetary and fiscal policies may still have a role in supporting demand in some instances, the main problem in the region is not a lack of demand but low productivity growth. Efforts must be made to foster productivity. Institutional weakness must be addressed and inequality reduced if sustainable high growth is to resume.
- Topic:
- Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- Latin America
510. Quantity Theory of Money Redux? Will Inflation Be the Legacy of Quantitative Easing?
- Author:
- William R. Cline
- Publication Date:
- 05-2015
- Content Type:
- Policy Brief
- Abstract:
- Since the onset of the Federal Reserve's unconventional program of large scale asset purchases, known as quantitative easing (QE), some economists and financial practitioners have feared that the consequent buildup of the Fed's balance sheet could lead to a large expansion of the money supply, and that such an increase could cause a sharp rise in inflation. So far fears about induced inflation have not been validated. This Policy Brief examines the basis for the original concerns about inflation in terms of the classic quantity theory of money, which holds that inflation occurs when the money supply expands more rapidly than warranted by increases in real production. The Brief first reviews the US experience and shows that whereas rapid money growth might have been a plausible explanation of inflation in the 1960s through the early 1980s, subsequent data have not supported such an explanation. It then shows that the quantity theory of money has not really been put to the test after the Great Recession, because a sharp increase in banks' excess reserves and corresponding sharp decline in the "money multiplier" has meant that the rise in the Federal Reserve's balance sheet has not translated into increased money available to the public in the usual fashion. The most likely aftermath of quantitative easing remains one of benign price behavior. However, if nascent inflationary conditions materialize, the Federal Reserve will need to manage adroitly the large amounts of banks' excess reserves that have accumulated as a consequence of QE in order to limit inflationary pressures.
- Topic:
- Economics, International Political Economy, International Trade and Finance, and Federal Reserve
- Political Geography:
- United States